♪ imus in the morning ♪ >> downgraded are we next in line? good morning, everyone, france loses its gold-plated financials, and they can't control the rich and can't control entitlements. does that ring a bell here? three days ago and non-union wal-mart, filed a complaint and asking for help from president obama pro union labor board and the twinkie gets a stay of execution and maybe so do the unions, maybe. a bankruptcy judge doesn't like the bonuses for management, mediation talks begin. and so does "varney & company."

big show today. a millionaire who wants to pay more in tax, can't wait for that. and hewlett-packard sinks. i always wait until the last minute. can i still ship a gift in time r christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.

>> we've got a big developing story, we're following the share price of hewlett-packard very closely this morning because of allegations of serious fraud. hewlett-packard says a british company wildly inflated value before hp bought it. hp paid 10 billion dollars for autonomy, that was a year ago. meg whitman's hp says the brits fraudulently pushed up the value by 5 billion dollars. this is not what meg whitman wants as she tries to get a grip on a sinking technology giant. look at this, pre-market activity, hewlett-packard way down. by the way, that stock is one of the 30 components of the dow industrials. that's a loss for hewlett-packard shaving about 13 points off the dow and futures pointing 17 points lower. here is another big story of the morning, france downgraded.

moody's taking away france's perfect triple-a credit rating and worried about economic growth. they're drowning in debt. when francois hollande was elected taxed the rate on the rich 75% and loaded the lowered it to 60 for some workers all in the name of fairness and didn't help avoid a debt downgrade. the same policies are being pursued here. democrats want to raise the tax rate on the rich and the president has yet to produce a plan to reform entitlements. our debt grows by 1 trillion dollars a year, are we gambling with another downgrade? we'll talk to a rich guy, he wants, really, he wants to pay higher taxes. his name is eric schoenberg, he's calling himself part of the

patriots for fiscal strength. and fox news reporting a 48 hour truce, brokered by egypt this morning and israeli battering the bank, a building, hamas says it's a private enterprise. secretary of state hillary clinton headed to the region. she will try to diffuse the conflict. she'll meet with israel's prime minister benjamin netanyahu followed by senior officials by the palestinian officials in the west bank and then on to cairo to meet with the muslim brotherhood. none of these developments had noticeable impact on the markets. look at the price of oil, it's down today and holding at $88 a barrel. as for the price of gold, moved up in the last couple of days, but we're down three bucks today. no impact from gaza on oil or gold. president obama wants reelection and right away, fights for higher taxes on the rich. our next guest says he's still an amateur. but first, france's downgrade, that reminded us of this famous

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>> all right. we're looking for a very modest drop for the dow industrials at the opening bell today. remember, we were up over 2,000 points yesterday and down maybe, 15, 16 points, finishing ringing and we have housing start numbers coming in and we begin work on, i believe, under 900,000 new homes and best record in four years and that's going for us. other than that, what have we got. we've got a dow jones industrial average, opened slightly lower and i've got the big story and allegations of serious fraud in morning, hewlett-packard says a british company cheated it before hp bought it last year, from the get go, where did hp open? >> it's at 1165 or so, let's see 1161. and that's down 12% and that's surely going away on the dow industrials, this is a charge that expected to take 8.8 # billion in charges here because of this accounting.

and so, it's a big, huge story and the same problem for-- >> and we are you've got meg whitman taking over a company trying to reorganize, it's in very, very bad shape and she takes it over and now she gets hit with what could be a massive accounting scandal made by her predecessor. it's taken over. >> it's a big whammy and apparently they have done a lot of accounting and checking into it and trusting others to take a look at it and rely on audited financials in doing this acquisition and obviously it wasn't good enough. >> raymond james just downgraded hp and that's another reason for it selling off, what about, 13%, and we'll keep an eye on it. and the dow industrials are down 40 points in the first couple minutes of business, down 39 there. the question, will the nlrb really come to the aid of wal-mart? wal-mart asked for help because some of its workers inspired by an outside union are threatening to protest on friday of this

week, black friday, they charge low wages and poor working conditions and planning to ask for one of the most important retails. the wal-mart says a union is helping organize and encouraging this protest, the nlrb. national labor relations board could step in, could issue an injunction, to prevent the protests. and look at wal-mart stock at $69 a share and no impact from this proposed protest, a big day finally. here is our next guest, he says even after four years under his belt a reelection to boot, president obama is still an amateur. in a fox news.com article, ed klein writes this, quote, he is a happy warrior on the campaign trail, doing and saying whatever it takes to get elected, but when he leaves the oval office he becomes a different person. and joining us ed klein, author of the book "the amateur" and

you notice no change in the two weeks since reelection? none? >> i think he's walking a fine line between the man he was before the election, which was definitely the amateur, very detached, not available to other politicians, very self-involved, turned inward and so forth, to a, what he's trying to do now, is reach out to unions, liberal groups, civic organizations, business groups and so forth. the question is, has he had a personality transplant? is he a new man? did he go through a near death experience during the election and come out different? i doubt it very much. stuart: you don't think so, do you >> i don't. stuart: that's why your article is entitled "he is still an amateur". >> exactly. stuart: i want to put up a picture, during the campaign. it's of the president with a young gymnast. they've both got-- i'm sorry, last week, this is

after the campaign has ended. they've both got a funny look on their faces and this is tweeted all over the place, apparently. is this not the president getting to grips with his personality and outreach and looking better. no, no, it's a perfect example of being a wonderful performer. the man could have been on "saturday night live." he's perfect performer. he's wonderful when it comes to taking photographs of himself, but the question is when he gets in the room with republicans, and he has to make a deal. stuart: that's what we're talking about, isn't it? how is he going to come across in the face-to-face negotiations with the republicans to get a deal done before the end of the year to avoid the fiscal cliff. >> the definition of a deal is compromise. a deal means i give a little, you give a little. is the president really willing to give at all, i don't know if he is. stuart: why should he. >> indeed, why should he?

he campaigned on the idea of taxing the rich and why should he back off on a compromise, on key rinciples when he's in power. >> and what the republicans have been telling me, i've been doing reporting on this, they say they think that the president is actually-- would like to see us go over the fiscal cliff because if we do, then the people will blame the republicans and then he'll get a better deal after we go over the fiscal cliff. that's what the leadership of the republican party is thinking. stuart: all politics all the time, no compromise, just go for what you've got and what you want. >> yes, do whatever it takes. it's really macavelian. and if anything, there's a good streak of macavelia in this president. and this is a famous picture of president obama hugging his wife.

and the caption reads, now hug a republican. you don't thinks' going to hug any republican not now, not ever? >> i don't think so and i think we're headed in the second term for a very contentious battle between the president and the republican party and i don't think either side is going to give very much. stuart: ed klein, i hope you come back and see us again soon because this is fascinating stuff. >> i'd be delighted. stuart: thank you very much, sir. a story of interesting timing for you right now. gun maker ruger, will pay a special dividend, $4.50 a share the company says it's because they have confident in the future of that company. stern ruisturm ruger doesn't usually pay a dividend. but this thing, it's a gun maker of course, it's gone straight up along with demand for guns, 51 a share this morning up another 5%. california back at it. the state's cap and trade

program has the first pollution permit auction and sold out of carbon credits. does this set the stage for a national carbon tax? we'll cover that story, new at 10. and also, on the green agenda, zero emissions, vehicles, the problem is nobody wants them, the new at 10 top of the hour for you, i want to go back to nicole, a big loss to best buy. what's going on? >> nothing good here for best buy and they talk so much about the former chairman, richard schultz and whether he was taking that company private and that gave the company some volatility. but the facts remain, best buy, the electronics retailer is coming out with numbers that are missing the analyst's estimates. and profit and earnings per share are below what estimates they have anticipated here for this company, and so, stock moves here to over a ten year low and it's down almost 8% today and you know, there's no real light at the end of the tunnel, i don't hear them

saying, you know, what, a crummy quarter, but we'll nail the holiday season. if that gives you any glimpse of hope. >> i think we've got video literally of people lined up and camping out outside of best buy in anticipation of big bargains on black friday. wait a second, i suspect those people at the front of the line will buy everything they can as low as they can and then sell it on the internet. >> well, when you don't have a job in america, because there aren't enough jobs created you make a job and this is a good job. get something for less, sell it for more, money in the pocket. stuart: good one, nicole. very good. by the way, the dow jones average is down 43 points now, pushed a little bit lower by hewlett-packard, which we'll keep on our screens throughout the show. it's way, way down. and time is money, so here is 30 seconds worth of what else we have for you. tax the rich, what the president wants and more than half the

country supports him. but even a rich guy, we'll talk to one very rich guy who says, yes, please, raise my taxes. good for the country. and greg gutfeld, his new book is called the joy of hate. and people love to hate other people, is that why we have class warfare and tax the rich? greg is a rising star, on this program today. college football teams, changing conferences and shaking up the sport. they're going wherever there is more money, can't blame them for that and throwing away many years of tradition, just wait until you hear how much money is involved in this. all right, it's tuesday morning and i've got seven early movers, lots of earnings reports, we call them what they are, roths. hormel increases its dividend. nonetheless down a buck 30. krispy kreme takes in more money than expected and raises profits guidance. it's up. shoe carnival's profit, the guidance there disappointing, down it goes.

emerging markets growth gives heinz profit a boost and that stock is down. and jack in the box, the profit there, disappointing. the stock is down. a strong back to school season helped the maker of naturalizer footwear, brown shoe, post a better than expected profit, it's up. signs of life at group on, they had a big stake in that company and groupon, up to 3.45 a share. and after twinkies, they get a stay of execution. hostess, the bakers union avoid liquidation, is it another victory for the union and would the company be better off with a private equity owner. we'll talk to a former bain capital executive next. ♪ [ male announcer ] at scottrade,

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>> all right. the dow jones industrial average, some of that loss from hewlett-packard which is way down because of an accounting scandal with a company that it bought a year ago. big deal. now, look at the price of oil, we've got action in gaza still, but oil is down a little this morning, but it's still holding at $88 a barrel. question, as hostess and its unions meet with a federal, with a mediator today. in a last ditch effort to save the company, we asked the question, could private equity be the one to jump in and save hostess, save the twinkie, save wonder bread. u.s. leader richard trumka blames the downfall on bain style wall street vultures. here is such. and unintended consequences, and here is former bain capital, new mitt romney well.

and let's put this away for a second. you know the private equity business, would it make sense for private equity to jump in and buy the brand, twinkie, wonder bread. >> probably not, but at some price, sure. the problem with all of these companies, the amount of profitability you can get over and above the union wages makes the company worse less than the replacement value of the assets. it's difficult to-- >> you wouldn't walk in and buy the brand? if you did, you'd want to get rid of all the employees, and unions and contracts everything else. >> we'd have to have the assets to build the product. stuart: to bake it and distribute. >> if you had one and underutilized, but build one at reemployment costs you'd have to get a lot of profit out of twinkies to make it work. i suspect that it doesn't cover replacement costs and that's why the company continues to decline. stuart: can i hold you up for one second? i've got to break news for our viewers. >> sure. stuart: may sound technical, but it's important. one of the fed presidents, one

of the presidents on the federal reserve says that congress should step in and stop the fed from printing up a ton of money. peter barnes has the story, this is breaking right now. and now, i just encapsuled it there with a brief couple of sentences, have i got it right? >> you do, stuart. jeffrey lacker, and a voting member of the fmc, highly political of the loose money policy by the fed, qe3 and everything else, he's worried that unconstrained policy will create thorny problems for the economy down the road and the feds should check at its lending policy and if not, quote, one could imagine legislation that limits the fed to narrowly defined set of lending activity. very short sof vents banks and rates above market rates. if the fed cannot limit n autit

its own. stuart: sounds like ron paul. stuart: they eventualfore breaking that. back to ed. you're saying that private equity doesn't make sense for a regular private equity company to walk in and buy the brands because they don't have a bakery and the distribution service to do it, but what about an established baking company, we're talking about grupo bimbo, a mexican operation. they could come in, but if they did, they wouldn't want the union contracts, would they. >> if you had the union contracts you would have profitability over and above that. may not have a lot in this case because they're going bankrupt. even if the judge sets it aside, and wages are lower, you could run the company, but basically run the company into the ground because you're not going to put more money into the plant because you'd never recover the money putting in and you see it

in the steel industry, the auto industry, and the logical thing to do is minimize the amount of investment going back into the company and gradually run the company out of business. there's a purchase price that makes it work to buy the assets and keep the union in place, but the jobs will gradually go out of-- >> you'd be a vulture capitalist. >> run it as low as you can get and run the company into the ground and milk it for whatever you get out of it. >> you can't blame the investors, if this is what the union demands that's what the investors do for the profits. stuart: could it be that the vulture lost the election? and thank you. time for the gold report. we're almost at 9:50 eastern, 1732.20. we're down two bucks, all right, on "varney & company," i refuse to say his name. so, i call him the ex-husband of

heather mills and now he's teaming up with peta, and chaming in on the american-- he's a brit and he's chiming in on the american holiday of thanksgiving. and you, heather mills' ex. charles and david are steamed about this.

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>> the man who i refer to as heather mills' ex-husband, now what i'm talking about, he has a message for americans on thanksgiving. don't eat turkey. it's part of a new ad campaign for peta. all right, david, let me, let me expound for a second here, this guy, whose picture is just on the screen. first of all, he insults-- >> sir paul mccartney. stuart: i refuse to use his name. >> a crazy ideas, but call him by his name. stuart: you're on the right trk. this fellow, he comes here and insults former president bush and comes over here and tells us americans what we should eat on our national holiday. >> other than the fact that it's outrageous, why bother to get, to get your--

>> it's a vehicle for me to rant about this fellow. >> the point is this guy an a pothead doesn't see straight. i think the first thing he does when he wakes up is take a puff of a doobie. the guy's been stoned for the past 50 years and anybody who takes any advice from this guy has to be nuts. stuart: the and the entire crew just burst into laughter. >> and the entire-- >> and puffing on a doobie dates you. >> i thought it was up-to-date. stuart: go ahead. charles: if we didn't eat the turkey do these people believe we'd have like a million turkeys running free in society? listen on route 17 right now there are three dead deer. i would have rather saw someone killed them in the woods and eaten them as opposed to driving by and seeing the carcasses there. >> there are a lot of wild turkeys running around westchester. >> have you ever seen one? >> seen them? they're the dumbest animals on

earth. stuart: they're good. >> why? >> because they kill the snakes. >> ben franklin wanted that to be our national bird. stuart: okay. new at 10, two only-in-california stories for you, both involve big money and both involves what else, the environment. could california be the test case for a national carbon tax? ♪ [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going onow -- but hurry, the offer ends soon. now we need a little bit more...

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>> new at 10. we plant our flag in california with two stories so show how blindly green the formerly golden state has become under jerry brown. first, a sale of pollution permits goes well. businesses buy up all 23 million at $10 apiece, that's a carbon tax. could set the stage for a national carbon tax. that is story one. number two, the strict rules on green cars, forcing automakers to make and sell zero emission vehicles in california that no one wants to buy only in california. we're talking about it all through this hour. to the big board, we're down 38 points after a big run-up, 12-7 where the dow is now. here is our company. charles payne is here, david asman is back and nicole petallides from the floor of the new york stock exchange dealing with a big story, nicole,

hewlett-packard says it was scammed by british company called autonomy, says autonomy fraudulently inflated its value before hp paid 010 billion for it. that's why the stock is down i guess. >> and they're taking 8.8 billion dollar charge improprieties, with that the stock has sold off dramatically. it's down 13%, number one loser in the dow jones industrials, also, in the s&p 500 and this stock, stuarts, is at a 10-year low. stuart: i've got to say i feel bad for meg whitman. she's taken offer this company and tried to turn around a technology giant and now she's got to worry about what happened with her predecessor and the purchase of this british company. it's a tough row it hoe, is it not? >> and i feel badly for her as well and hewlett-packard has gone through had a slew of ceo's and heads of the company and it's just one issue after another. and this is today's big issue. stuart: it's bad to see hp laid

as low as this and there you have it. nicole, thank you very much indeed. france's economic credentials took a hit after a rating's agency, moody's, stripped the company of the triple-a rating. and france's president hollande lowered the retirement age to 60 from 62 and raised the taxes on the rich. he imposed 75% tax on earnings of more than a million euros a year and the national debt continues to rise. could this be the writing on the wall for the united states? as we approach the fiscal cliff. an entitlement talks of well, nonexistent, frankly. joining us now a lonnie chen, former advisor. and do you see a downgrade on america's horizon giving the policies we're pursuing just like the french? >> yeah, stuart, that's a good point. thanks for having me on again. i absolutely think that a downgrade could be in our future. if we don't get our fiscal house in order and do what we need to do on the entitlement side we're

headed for a fiscal disaster. i'm saying that the republicans, they will to cave before the end of the year and allow president obama to raise the-- to raise the tax rates on the rich. i'm saying the republicans cave. do you agree? >> well, i hope you're wrong, stuart. i hope the reality is they have talked about more revenue being on the table and i think that's probably a prudent move, but closing deductions and raising rates seems like absolutely the wrong course, i hope you're wrong. i don't, i don't know what is going to happen here. truthfully, but i hope you're wrong. stuart: i'm just looking at the political reality. come the end of the year the president says you guys are defending your rich pals, you're putting america into recession and you take the blame, it's your fault. i think that's what's going to happen and they have the case. >> well, unfortunately, i think they've got to make the case what the president is going to do is further slow the economy. in fact, the policies he's pursuing, he's talking about raising rates and closing deductions and a host of other things, that, you know, the

least of which, by the way, is this effort to penalize those who have been successful. you look the at everything the president's doing, all the proposals he's got out there and all they'll do is further slow the economy. so, i really hope republicans are able to make the case effectively toward the end of the year here. stuart: before you go, i want to roll a clip. what charles payne, who is here now, what charles payne said in response to mitt romney saying that obama won because of gifts he promised. listen to this. >> here is mitt romney, what he had to do. he had to explain, he had to yell. you know what? those are wooden horses, they're not gifts, those are wooden horses, don't let them in, don't let them in! instead he's whining about this, and sitting in your parents basement until you're 27. it's not a gift. it's a curse. qualifying for health care, it's not a gift. it's a curse. stuart: lonnie, he's with me now and he's the not going to say anything else. but take his point, lonnie, that mitt romney should have pointed out the curse of all of these

give aways from the government, should he? >> well, i think that's one of the things we tried to do during the campaign was to identify, you know, the problems with short-term solutions, the problems with the kind of solutions the president's pursuing. you look at obamacare, it's absolutely a huge trogan horse for government-run health care. that's not what our government needs and our economy need and in some part i agree with what charles is saying. stuart: charles. charles: the only thing that i would say, i was responding to comments that mitt made on a conference call after the election, which sort of suggested that the certain group of people, young people, dark-skinned people, they're greedy, moochers and like gifts when in fact all americans like gifts and same people living in apartments with no heat, no water and rats and roaches, might say, romney, isn't it a gift to have mortgage income deduction? and i think he laid on the 47% the worst way possible and make it so much harder for any republican going forward to get the votes that you guys didn't

get. >> look, i don't want to sit here and second guess what governor romney after the election. charles: why not? why not? second guess it and let's talk about it. >> charles, it's hard to beat an incumbent president-- >> yeah, yeah, yeah, it's hard if you tell 47% of the people you're a moocher, let me have your vote they're going to say, no, no thanks. you better talk about it and think about it all i'm saying, my man. if you guys don't want to talk about it. >> no question that-- >> you'll never win the white house again ever. >> there's no question the republican party has deep self-examination, charles, i completely agree with you on that i'm not going to second guess our nominee. stuart: we thank you for coming on board and we appreciate that. charles. are you done. charles: listen, the asian vote, asians have a median income of 61,000, double black americans, they have a 4% unemployment. better than any racial group in america and believe in hard work and religion and so many common conservative principles as

republicans, and they 71% of it. and there's a problem with the message. >> what i'm trying to get at is, you would have preferred the republican candidate to say, look, you're getting all of these goodies, but it's not going to do you any good. what's that you wanted-- >> it doesn't and your family and-- >> you wanted him to say that. charles: of course, throughout the campaign, but also i wanted him as a post-mortem to start to he heal the process instead of making it worth. >> and charles, corporate welfare in there. it's not just individual welfare that anybody is susceptible to. corporate welfare is part of the game, too, condemn is all. stuart: i've got to move on and thanks, gentlemen. we're following shares of the gun maker sturm ruger. it's going to pay a special dividend $4.50 a share before the end of the year, by the way citing confidence in the future of the gun making company. and sturm ruger doesn't usually pay a dividend. why now? higher gains taxes that probably will be coming in next year. look at the stock price, this

thing is straight up. 5%. very, very strong sales of guns and charles and david weigh in in the next hour. first our new at 10 stories. california rolls out the cap and trade plan. already exasperated. permits for $10.09 each and allows them to release one ton of carbon, a carbon tax, a moneymaker and i would say that the feds are going to follow suit. it anyone want to disagree? >> yeah, absolutely, the president is trying-- he couldn't put it through congress even when he had democrats controlling the house of congress he couldn't put it through and now state by state and the president of course going to use the epa to try to do it nationwide. it's not just companies. everybody is a polluter. you are a polluter because every time you exhale carbon dioxide is out of your mouth and according to the government that's a part of the pollution problem.

so, everybody, this legislation should be reed by all americans because it's scary. what it says is not individuals, not companies, but polluters, that includes all of us, the government now has control of the air that comes out of our mouths. so, that eventually all of us, not just corporation,s, not just companies are going to have to buy the carbon tax credits. stuart: that's a long way down the road. >> i do not any it's so-so long. i think by the end of this administration. stuart: and chrysler the fiat 500 e sub compact in california. there isn't much demand for it it's a zero emission car. the state required car companies sell clean cars. won't let them get away with just selling high mileage gasoline cars, some will have to offer some electric cars in that state and chrysler says it went turn a profit on the new car sales. charles: what both of the stories have in common, they

disturb the free market and usurp the decision of our own free will and make us ultimately have to buy cars we don't want to buy. either go out of business-- you know with the cap and trade thing. the caps go down and allowances go town, ultimately, how can a company have zero emissions unless of course they're floating one of these 21,000 species of algae and sucking up the carbon. stuart: good point. charles: it's a major tax that's going to make our businesses uncompetitive and take away choices for average americans. stuart: a gusher of money for the government and they're pushing you around. >> it should be mentioned that chrysler is owned by fiat. fiat is losing money like a seive, going to be in debt. 6.5 billion dollars and of course, they're not supposed to take money from chrysler, they won't be able to siphon any money from chrysler after this thing. stuart: all right, president obama wants the rich to pay their fair share. now, a group calling themselves the patriotic millionaires has seemed up with the president. they're okay with paying more

taxes. and you've got to wait, we'll talk to a patriotic millionaire here in the studio after this.

>> stocks mostly lower this morning, right now the dow jones industrials is down 50 points, but remember, the dow was up over 200 just yesterday. let's take a look at apple. that stock is slightsly lower

after a very big gain yesterday. apple jumped about $40 a share, that was yesterday and described the recent selloff in apple as insanely insane. down a fraction today. groupon up big. a hedge fund buying 10% of the company. the stock is up 9%. all right, now the latest from the middle east, fox news reporting a 48-hour truce brokered by the egyptians and we've been following the conflict and who makes so-called the iron dome. it's a russian company that makes the missile and the israeli company, and the u.s. pays a lot of money for the iron dome. we're back with the patriotic millionaire. d the only way tot a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spo [ male announcer ] break from the holiday stress. save on ground shipping at fedex office.

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million dollars per year. >> well, there's a kind of confusion now, historically i think millionaire referred to somebody who has more than a million dollars in wealth and now confused to somebody who has a million dollars. stuart: reading between the lines here, if you don't earn a million dollars a year, you're not going to have to pay the extra taxes on a million dollars a year income, are you? >> well. stuart: somebody else will pay the higher tax rates that you want them to pay? >> no, my position is that tax rates ought to go up on incomes above $250,000 a year, which is of course the issue that's currently under discussion. and i certainly fall into that category. stuart: okay, what about people like me, i've got six children, seven grandchildren, i earned and worked for every penny that i made, i already pay more than 50% of my income in taxes. you want me to pay some more? you don't think i've paid my fair share? >> there are a number of different issues that get involved here. i think, let's begin with the basic issue, this country is

facing a fiscal disaster. stuart: no, let's begin with me. >> okay. stuart: do you think that i should pay more than 50% of my income in taxes. i'm an up and coming immigrant striver. you want to depress me. >> i think those who have done well by in society to contribute more to this society. stuart: 50%, what about people like me, six kids, six college educations, seven grandchildren. >> lets me say i'd be curious how you're paying more than 50% since the top rate on income at the federal income tax level is 36% so i assume you're adding in taxes beyond-- >> when i say 50%. 50 cents on the dollar i'm basically saying that federal income taxes and state income taxes add up to a net loss of 50 cents on the dollar for me for every extra dollar that i earn. i say that is unfair, but you want me to pay even more. >> well, i do want you to pay

more. don't you, yeah. >> let's go back to the issue you alluded to. my trying to get you to pay higher taxes. i support a number of important changes in our tax policy and one of the important ones that i support is that i don't understand why people like you, who actually work for a living, should pay higher tax rates than people like me, who are in the majority of our income from investments. stuart: wait a minute, you want me to pay even more for heaven's sake. >> i say i should be paying even more than the difference i want you to pay. and again, to focus on each of us as individuals, i think belies the most important fact. stuart: how are we supposed to take this other than as an individual? here you go to the white house, you have this meeting with the president and you are not going to pay higher taxes on-- >>, but i'm going to pay taxes-- >> on the million you've accumulated and calling yourself patriotic millionaires. you've accumulated a million bucks and living on it, thank you very much.

and i'm going to pay more money on my income, you are saying, i, stuart varney who came here with nothing, has worked for every red cent he's got should pay more. >> let me ask you a question, do you support estate taxes? >> no, no, i don't. >> you don't support estate taxes so you want your children to be able to be in my situation, paying lower taxes than you who worked for a living because you made the money for them and gave it to them. stuart: ul make the argument that the state would make a lot more money if they abolished the estate tax. it's a separate story. >> now you're switching to the argument that the state is going to make more money. so if the question is what's kind of tax level is actually going to generate more income. stuart: oh, yes, let's talk about that. what we should do, we should lower tax rates and abolish some deductions. that would bring in a whole lot more money to the federal treasury, wouldn't it. >> i say let's raise tax rates and also eliminate these deductions, our federal government is facing a fiscal

disaster and seems to me, eminently reasonable to ask that most successful people in this country who benefitted the most from the system that our government has been able to create to contribute to resolving that problem. stuart: if we raise taxes on the people making more than $250,000 a year we bring in 87 billion to the treasury, right? that's the number, okay? that's from the government itself. 87 billion. that's ten week's worth of interest on the federal debt. it will do nothing, it will in fact depress the motivation of wealthy people to go out and do another job, work harder or make money in another direction. >> i think the evidence on that spefr issue is not there. there is no evidence that in fact higher taxes cause-- >> hold on a second, you don't need evidence. david: you need math. the president is big on saying, it's a matter of math. the math is we have a 1.1 trillion dollar deficit for year off year. and the stimulus turned out not

to be a one-time event, but regular line item. the huge deficit. 80 billion dollars is the most, the most raised every year for raising the tax rate. that's only 8% of this deficit. where do you get the other 92%? >> the idea that we shouldn't do something because it's not going to solve the problem totally is ridiculous. >> but if it makes-- >> when mitt romney was asked. >> and make worse-- >> when mitt romney was asked about how we're going to solve the sit he talked to reducing funding for pbs. do you know how much money goes to pbs. david: raises the most amount of money, it's increasing growth, growth in the economy and if you raise tax rates, decrease fwroet. >> when do we have higher growth rates in the economy. in the united states and economy in the 1950's when the top marge cal rate on income was-- >> you know who paid that? and adjusted for inflation, that cut off would be 3.6 million dollars. >> and i would be fully in favor

of a higher rate on people with incomes at that level. charles: and here what is i have a problem and i read a couple of articles on you and i know you inherited a certain amount of money. you get to people, families who struggle to stuart's point and family business $400,000 a year, i don't know, plumbing, a couple laundromats and at the end frt day you inherited money, but i want to punish them for success. and i am so contemptuous of people in your organization who want to punish people who have made, who have barely achieved the american dream and make it harder for their children to-- >> did you inherit wealth. >> first of all, i inherited wealth and made money on my own. stuart: you inherited wealth. >> all three of us. >> gentlemen, we are-- >> first of all, i re, restate my basic point. do you support the idea of equallizing rates on investment income and on income that you earn from working?

because this is a point i made repe repeatly. >> why you guys-- >> hold on a second you asked a question and let me answer it, absolutely, a flat tax, steve forbes has been arguing for a long time. make us all pay the same rate for our taxes and get rid of the deductions, you're a flat taxer, great. >> you're confusing multiple issues, the issue of what the tax rate is. steve forbes believes that we should not have anybody pay income on capital gains. is that not correct? >> on money that you've already earned, on-- >> on capital gains. >> money you've earned. >> you're making money and money that-- >> hold on almost out of time and have a last question. if you want people like me to pay higher taxes, okay, or people like yourself to pay higher taxes, did you bring your checkbook today? >> i don't have my checkbook. stuart: will you write a check to the government and pay the taxes voluntarily that you want others to pay.

>> taxes are not a voluntary process. taxes the price-- >> you want other people to pay, you're a millionaire and you want other people to pay higher taxes, why don't you get right out in front. >> i want all of us to pay higher taxes. stuart: i challenge you to do it. >> this is entirely beside the appointment. stuart: you make millions, but won't do it yourself. >> i'm trying to make us all. stuart: you inherited your wealth. >> you and i should pay equally. and you're now asking why should you be able to free ride. >> free ride? >> free ride? >> wait a second, would you agree to not allow the government to do anything for you? you're not going to allow the police to protect you you're not going to allow the fire department to put out a fire and not going to let the-- >> and that's the argument-- >> that's the same arguments. stuart:. >> and pay for those so you can free ride on those, you don't want the benefits of government. >> and eric, hold on a second. people are paying zero, zero

federal income tax sucking up more of the benefits in a day than stuart varney would in a year. the fire department and policemen, welfare office who is sucking up the benefits, it's not stuart varney. who is sucking up the benefits? is it reasonable to ask me to voluntarily pay more when you're unwilling to voluntarily accept that you don't want the benefits the government provides. are you not going to drive on the roads that the government pays for, are you not going to use the bridges and tunnels that the government pays for. stuart: we're 0 out of time. i'm sorry, i've got a hard break, that's the way it in television. a pleasure, come back again. >> thank you. stuart: my take on fairness president obama is next.

>> france has been downgraded. paris has lost its triple-a rating. the government of president hollande wanted to be fair. he raised taxes on the rich and actually lowered the retirement age. that helped the downgrade process. so, here is my take on fairness here in america. we're told that the rich should start to pay their fair share. start? the top 1% already pays 38% of all federal income tax and 47% of those who work pay none,

zero, nada. nonetheless, the president won on a tax the rich campaign and little doubt if you make 250 k or more, you will be paying more. would it not be fair then to cut or at least rein in the transfer of money of transfer of money from the middle class to the poor. it's the out of control spending that is responsible for the massive increase in our debt and 60% of all federal spending is a transfer payment from one small group to a much larger group. fairness suggests entitlement reform. don't hold your breath. like mr. hollande, president obama was not elected to be fair to all, just fair to those who voted for him. so, you want to hear constant talk about the rich paying more, but very little about spending cuts. that's why america risks another downgrade just like france.

>> i just want to do a little bit more on the patriotic millionaire. you know the gentleman who's worth an awful lot of money wants everybody else to pay higher tax rates. let's bring from chicago trey. i know you didn't see the interview, let me just give you a quick run through. a gentleman sat here in noosew k

with me, he wants millionaires to pay more taxes, he doesn't earn a million a year, he's sit sitting on a million an area and he won't pay any more taxes other people will. >> first of all, this particular millionaire needs to go back and take some math classes. here are the facts. if you take the forbes 400 and you confiscated 100% of their wealth, i don't mean just raise their taxes, i mean, took every dime of their wealth, that would cover the u.s. government fiscal deficit for 2013. for one year. so what are you going to do for 2014? the issue in washington has nothing to do with revenues. the issue in washington has to do with spending and washington has a spending problem. that is a fact. so, don't give me this patriotic nonsense. how about it being patriotic that there are policy makers in

washington can manage to figure out that they're driving us down a road to ruin here. stuart: you know, trey, you never ever let me down and you're really good today. thank you very much indeed. you agree with everybody around this table. we'll see you again soon, thank you, sir. >> tax the rich, a mantra for the democrats, and polls show a majority of americans agree with that, yeah, tax them. is it jealousy perhaps? joining us now, wait for it, greg gutfeld. >> whoa. >> this man is a star. diminutive, but a star, on red eye and "the five", a best seller, "the joy of hate". how much taller are you than me. >> about six inches. >> we make eye contact in the hall, sir. stuart: sorry about that. are' a risen star.

>> i don't know, i don't know what i am, frankly. my wife doesn't know what i mean either. stuart: so, welcome to "varney & company," good to have you with us. >> thanks. stuart: "the joy of hate" do you think that people hate people in america and there's joy in hating the rich? >> now what? i think that everybody wants to be rich. however, they, they have kind of bought into this idea of like that fairness is somehow an actual concept. and this country is based on equality of opportunity, not equality of outcomes. and that's what we-- that's what we're placing it, one with the other, and it's now mean to compliment somebody. like, for example, if you expect somebody to work hard, that's an insult. and it's like you're supposed to say, you know, we use the cliche, up from your boot straps. you can't do that anymore, because that's kind of like seen as-- >> well, it's better to be a victim. >> exactly. david: victim hood is the pinnacle of being. >> so fairness is now this

frosting you put over everything and it's absolutely meaningless because it does nobody any good. it's like, when you hear fairness, you know, grab your wallet because it means somebody is taking something from you. stuart: you're a profoundly conservative guy, aren't you? you're a humorous guy, you make people laugh and i'm sure that's your intent, but beneath that, you're a conservative guy. >> i guess i am. i went to berkley which was, if you ever want your kid to become a conservative send them to berkley, which is the ultimate utopian socialist nightmare where everybody could do what they want and nothing happens. that's conservative. i would say i'm probably more of a libertarian than a conservative, but i'm leave not a liberal. stuart: do you invest? >> no, i'm terrible, terrible. my eyes glaze over, a pathetic thing. i'm a guy who works with words. you do both. i can't do both. my brain is always coming up with jokes. stuart: you don't spend it all. >> i have made bad investments, i once bought a bar.

worst thing you can do. i bought a bar because i like to drink, i'll have a bar. it was the worst idea ever, lost everything. >> how is the book doing? >> book is doing great. it's not a healthy thing to watch amazon because you watch it go up and down and up and down and just like watching stocks. and i decided to stop looking at it. it got up to about number seven which was exciting and doing a lot of press on it. people seem to be really reacting to it and doing a book tour next week all through the gulf coast states. i'm actually even going to your favorite place, the villages. [laughter] >> why do you say that? >> come on, i want to hear it, why do you say that. >> you insulted short people and he can insult old people. it was an ageist remarks on my part. the villages is apparently supposed to be a pretty wild place. so, i'm going to have a good time. >> your height? >> yeah, my hate. how dare you, sir. fake outrage. you should be able to insult my height. i mean, that's what the book is

about. it's about people who take just, you know, jokes and believe that you mean them. and you know that it's not true. it's like we're just having fun. stuart: i understand that anybody who can drive at night does well at the villages. [laughter] that was rather good, i just made that up. all right. greg gutfeld, what a pleasure to have you with us. >> my pleasure. stuart: if could stay up late enough i would appear on red eye. >> you can't stay awake for "the five" and i certainly can't drive at night. >> i see him dozing in the green room a lot. put the shawl around him to keep him warm. stuart: unfortunately, that's accurate. [laughter] greg. >> it's made of money though. stuart: would you come back and this again? >> absolutely, it's a good time for me to get up. get stuff done early in the morning. stuart: greg gutfeld, a terrific book "joy of hate", good luck. >> thank you. stuart: this is in from the washington bureau, fox news

confirmed that senator warren rudman, a two term senator, helped to pass a ground breaking balance budget law in the mid 1980's. senator rudman, 82 years old.

>> you know, hewlett-packard is acting as a drag on the dow this morning. that company is taking a huge

charge relating to the purchase of a british company, autonomy about a year ago. and hp paid 10 billion for it, but now says that price was fraudulently inflated. former chief denies that, but hp is down big. green mountain coffee is up today. named a new ceo, mike kelly used to be with coca-cola, a day trade he favorite by the way. and the fed needs to stop printing money, on congress should put a law on what the fed can do. revolutionary. back in 90 seconds with a young republican and try to explain why running with people overwhelmingly support this president and he's a young republican. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the marke he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees.

so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.

>> i want to bring in nicole, to look at groupon, that stock is up suggestly. >> nice news for groupon. talking tiger global investment that often investors in tech startups such as facebook and revealed they took a 9.9% stake in groupon which tends to describe as passive rather than active. like being an activist, it's just the fact that they're getting involved. so, it's obviously some promise there and that's why the stock is up 11% today. stuart: and 11% is 11%, isn't it? case closed. all right, the fiscal cliff,

clearly, it's approaching and national debt, clearly, it's soaring and yes, there is conflict in the middle east and here is president obama posing with u.s. gymnast mikhaila maroney's not impressed look. and he got the youth vote and pictures like that may be one of the reasons why. and from turning point. usa. do you agree with that, the president coming on and personal with young people and that picture was tweeted all over the place. and that was part of his approach to that take voting group. it worked, didn't it, charles. >> yeah, it did and i have to kind of blame the g.o.p. i would wonder why mitt romney did not go on snl and comedy central. president obama went on the jon stewart show and the younger shows yet mitt romney did not go and try to reach the younger people and the election was defined by social instead of the fiscal issues and the g.o.p. did

not frame it that way. stuart: we didn't see-- i'm a conservative, i did not see that coming. i did not think that social issues would play a significant role in the election. i thought it was all the economy. lack of jobs, debt, terrible economic situation, that's what i thought. i got it wrong as well, charles. >> a lot of people i know, for example, i have friends in ohio and indiana and unemployed and can't find work and voted for president obama because of gay marriage, women's issues and the issues they voted on. are you now saying that the next republican candidate, the next leader of the party has to go out there and say, yeah, gay marriage is for me, legalize marijuana, free contraception, is that what you want to see in the next presidential contender from the republican side? >> not necessarily. you have to frame it in a different way. social issues are very important, but we've had conservatives win that are able it say, let's leaae it to the states or the issue has to be a

fiscal responsibility for anything else. i mean, i have people unemployed that i know young people that can't find worth. trillions of dollars of debt on their back and yet voting for mitt romney because marriage was made a big part of the democratic platform and the republicans were consistently on the defensive and having to defend those principles. look at todd akin and richard mourdock from indiana what defined the election and it should have been employment, the debt, the deficit and it wasn't. david: look at the subtitle, the celebrity president. celebrity is someone who gets a lot of attention and awards for not doing anything. >> the kardashians, this is a guy, barack obama, yes, a president, but he got a nobel peace prize before he did anything. even thousanows' not proving he deserves it, he sent hillary clinton to the middle east, isn't it time that he earns that nobel peace prize. stuart: he won the youth vote and hispanic vote and asian vote

and african-american vote. >> it's the concept of celebrity without any idea what he achieved. charles: charles is making a point that, charles. >> i also-- >> you make a great point. i spent a lot of time this weekend with a bunch of conservatives in the bubble mentality what should romney do. because so many people are saying what you're saying he wouldn't listen to them. >> i know, and i would love to hear a romney representative, someone from the campaign justify why he never went on comedy central. that's what my generation watches and get our news and as sad as that is we watch comedy central. snl. don't watch cnn or fox. and i would love a justification, why he wouldn't go on the media platform. even if he made a fool of himself, that's okay. he would have won respect from

the younger generation. stuart: you're 19 years old and know what the youth vote is all about. thank you for joining us. >> thank you for having me. stuart: college football, really big money in america, the sport is worth literally billions of dollars. football is such a big cash generator, one university is willing to pay $50 million dollar to switch conferences, how much money are we really talking about here? back in a moment.

>> rick perry wants to make drug testing mandatory for welfare recipients. this is controversial issue. florida tried to do the same thing, but got shut down in the carts. we'll monitor the story and bring you updates at they occur. some big moves and money being made in college football. the university of maryland accepted an invitation to join the big ten conference and they have to pay to leave the acc. maryland isn't the only school making moves. rutgers is expected officially to announce today it's jumped from the big east to the big ten. college football, huge money. that's why i'm shocked, charles. 50 million to leave. charles: to leave. that underscores the money and look, guys, we are reminded the scandal at penn state. how much money is involved to

the point where it's corrupted. it's just absolutely amazing. >> should we pay the college athletes who are generating enormous amounts of money to attend. charles: i'm one who said the college athletes should be getting paid. anddfree education, but they bring in a zillion times the education they're getting. an insurance policy, for their parents so they don't have to take money under the table that stuff. stuart: if you paid them. a mini nfl. charles: that's what it is right now except the pay. and more corruption from, you know, agents and look how many agents are squandering their money. stuart: david, any input. david: my daughter goes to boston college, a lot of football. and doug flutie, he was two generations ago, back in the early 80's, when he played football he brought boston college to the top and that brought in a lot of people, brought in a lot of money and

so, you know, if thing it's an investment in the future it's paid off and boston college is an example. stuart: if you pay 50 million to leave at that conference. david: it could pay off. stuart: if you join the bigger and better conference where you make more. david: boston college spent a ton of money when they had doug flutie in the early '80s and paid off in terms of endowments in the billions of dollars. stuart: last word, charles. charles: of course, david referenced flutie when people were popping marijuana, doobis rather. stuart: you forgot, it was puffing. charles: puffing, puffing doobies, more "varney & company" after the break. can't wait, can you? ss than t. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office.

stuart: earlier on the program, we had a lively interview with a patriotic billionaire. he wants people above $250,000 a year to pay more in taxes. it was a lively interview.

david has some point that he wants to tell you. >> i pay 50% of my income to taxes. i do not think i should have to pay that much. the president came out with his economic plan, it was called economic patriotism. am i on economic if i disagree? stuart: the word was probably used. charles: somehow the person achieving the american dream through extreme hard work, extreme sacrifice and a person who smokes weed everyday, drops out of high school, is more virtuous. here is a new message for america, the less i earned the more that is owed for me. stuart: that is